Price-to-rent ratio

Are interest rates at historic lows included in your equation?

The best data for sales price is the condo index done by SE, but it only goes back to 1995. The reason it's the best is because it uses repeat sales of the same unit to construct the index.

http://streeteasy.com/nyc/market/condo_index

Less good in methodology, but better in completeness, is Miller Samuel's average & median sales & rental data, going back 20+ years:

http://aggregate-data.millersamuel.com

There's lots to dig through there, but be careful not to draw conclusions from too finely-sliced data. Remember that unlike the SE index, the prices are not for constant-quality products: sales & rentals have improved in quality over time. You can get a sense of how much by comparing the gain in the average price per square foot, for example, against the SE index.

Jonathan Miller at Miller Samuel has put together all sorts of great charts with his data:

http://www.millersamuel.com/charts

The rough answer to your question is that in the 90's, ppsf averaged $300 vs. rents averaging $30. The ratio is now higher by a bit over a factor of 2.

The following shows how things compare in nationwide price-to-rents in the 90's vs. now:

http://economix.blogs.nytimes.com/2011/05/10/rent-vs-buy-a-longer-list

Overall, price-to-rents nationwide are 29% higher than the 90's vs. 100% higher in NYC. Economically, interest rates affect both equally, though the magnitude the effect "should" have can be debated.

Fixed mortgage rates now around 3% cheaper than the 90's average:

http://www.erate.com/mortgage_rates_history.htm

Here's one way to look at the effect mortgage rates "should" have. The gross rental yield went from 10% to 5%, for a 5% loss in yield. The 3% drop in rates resulted in a 2% after-tax benefit. So considering rents & interest rates, the annual yield on an NYC apt has dropped by 3%.

Using the nationwide data, the gross rental yield went from 9% to 6.7%. This 2.3% drop is closely offset by the 2% interest rate benefit.

inonada - I am indebted to you for your assistance. Thank you!